BoG appoints Advisor for the Sovereign Bank

The Bank of Ghana (BoG), has appointed an Advisor for the Sovereign Bank to supervise and monitor the bank’s recapitalisation efforts and implement governance reforms.

The appointment is based on some governance lapses identified by the central bank.

Sources at the central bank say the regulator has on several occasions cautioned the management of the Sovereign Bank about the breaches of the governance systems.

A supervisory report indicates failures to comply with the regulators directives that border on governance reforms.
Sources say the appointment of an advisor was necessary to avoid the bank relapsing into other phases that would require stringent remedial measures.

Reforms

The Sovereign Bank is, therefore, expected to cooperate with the advisor and comply with all directives to institute governance reforms.

A release by the BoG that spelt out the functions of the advisor indicate that the advisor will be entitled to attend the meetings of the board of directors of the bank and any such decision making body in the bank and will be expected to participate fully in the deliberations of such meetings.

The views of the advisor are expected to be recorded in the minutes of the meetings, although the advisor shall not vote on a matter of determination by the meeting.

Status report

The Sovereign Bank is also expected to bear all the expenses of the advisor in the discharge of its duty.

The advisor is also expected to furnish the Bank of Ghana with a status report on the bank as frequently as possible and will give recommendations on the next course of action to enhance the operational efficiency of the bank.

“The outcome of the on-site examination revealed some governance and capitalisation challenges which needed to be addressed.

“It is important to note that an advisor, unlike an official administrator, does not take over the powers, responsibilities and duties of the bank’s shareholders, directors, or management”, the release added.

Under Act 930, the advisor may attend meetings of the board of directors without voting at such meetings.

Sovereign Bank

The Sovereign Bank was licensed by the Bank of Ghana as a universal bank in January 2016 and begun operations as a full-service bank with a principal aim of making a difference in the banking and financial services landscape by being unique in its service delivery and product offering.

The central bank has, however, assured customers and depositors of the Sovereign Bank that the bank remains open for business under the control of the bank’s own management and that customers’ deposits are safe.